1. Irma Marie, as many investors, is a risk averse investor. Her investment- utility function defined by the equation below.

U=Er-12Aσ2

You are studying how Irma has changed her utility function before and after market events. You are looking at the Tech bubble, the Credit Crisis and the Covid 19.

Required:

                a. Replace in the equation above the value of the parameters you assume Maria had right before                   and after the impact of the crisis on U.S. the stock market. Justify your assumptions.

                b. As an expert and with perfect hindsight, what would have been the value of the parameters       you had recommended to use? Why?

A police Captain claims a Public Safety Film will reduce the number of speeding tickets at seven locations on the highway. The number of tickets at these locations before and after the film are as follows: Location1.234567 Before Film 21. 33 31 30 34 30 24 After Film 17 28 32 28 34 29 17 Difference45-1 20L7 The mean of these Differences is Z = 2.57,with st dev sd : 2.88 a) I4trhat is the parameter we test? b) what are the NuIl and Alternative Hypotheses? c) Using a = .05 find the Rejection Region and Test Stat. d) State the conclusion of your test.

A study was conducted to test the effectiveness of a juggling class. Before the class started, six subjects juggled as many balls as they could at once. After the class, the same six subjects juggled as many balls as they could. The differences in the number of balls are calculated. The differences have a normal distribution. Test at the 1% significance level. What conclusion can you draw about the juggling class including how to get p-value? Chart below.

Subject A B C D E F

Before 3 4 3 2 4 5

After 4 5 6 4 5 7

In each of the following questions, assume that there is no volume change when HCl is added to water in part (a) or the phosphate buffer in part (c).

(a) Calculate the pH when 0.029 moles of HCl are added to 1.000 liter of water.

(b) What is the difference between the pH of pure water (pH 7.00) and the pH of the solution after HCl was added?

(c) Calculate the pH when 0.029 moles of HCl are added to 1.000 liters of a buffer containing 0.396 M KH2PO4 and 0.201 M K2HPO4.

(d) The pH before the HCl was added is equal to 6.913. What is the difference between the pH before adding the HCl and after adding the HCl?

Two pucks are sliding on a frictionless tabletop. Block A (mass 4.11 kg) is moving to the East (+x direction) at 1.50 m/s. Block B (mass 4.93 kg) is moving to the North (+y direction) at 1.80 m/s. Assume the system to be both Block A and Block B. (Note: It could be useful to make a drawing of the situation.)
What is the x-component of the total momentum of the system before the collision?
What is the y-component of the total momentum of the system before the collision?
What is the x-component of the total momentum of the system after the collision?
What is the y-component of the total momentum of the system after the collision?

DELSING CANNING COMPANY IS CONSIDERING AN EXPANSION OF ITS FACILITIES. ITS CURRENT INCOME STATEMENT IS AS FOLLOWS:

SALES............................................................................ 7,100,100
VARIABLE COSTS (50% OF SALES).............................3,550,000
FIXED COSTS.................................................................2,010,000
EBIT.................................................................................1,540,000
INTEREST (10% COST)....................................................620,000
EBT.....................................................................................920,000
TAX (30%)..........................................................................276,000
EAT.....................................................................................644,000
SHARES COMMON STOCK..............................................410,000
EPS...........................................................................................1.57

The company is currently financed with 50% debt and 50% equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $4.1 million in additional financing. His investment banker has laid out three plans for him to consider:
1) Sell $4.1 million of debt at 11%
2) Sell $4.1 million of common stock at $20 per share
3) Sell $2.05 million of debt at 10% and $2.05 million of common stock at $25 per share.

Variable costs are expected to stay at 50% of sales, while fixed expenses will increase to $2,510,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates sales will rise by $2.05 million per year for the next 5 years.

Delsing is interested in a thorough analysis of his expansion plans and methods of financing. He would like you to analyze the following:

a. The break-even point for operating expenses before and after expansion (in sales dollars). ENTER YOUR ANSWERS IN DOLLARS NOT IN MILLIONS, I.E. $1,234,567.

b. The degree of operating leverage before and after expansion. Assume sales of $7.1 million before expansion, and $8.1 million after expansion. Use the formula
DOL = (S - TVC) / (S - TVC - FC). ROUND YOUR ANSWERS TO 2 DECIMAL PLACES.

c. The degree of financial leverage before expansion. ROUND YOUR ANSWERS TO 2 DECIMAL PLACES.

d. The degree of financial leverage for all three methods after expansion. Assume sales of $8.1 million for this question. ROUND YOUR ANSWERS TO 2 DECIMAL PLACES.

e. Compute EPS under all three methods of financing the expansion at $8.1 million in sales (first year) and $11.0 million in sales (last year). ROUND ANSWERS TO 2 DECIMAL PLACES.

0. 1. A total of 10000 hours was spent inspecting 400,000 lines of code with the result that 6000 potential defects were prevented. Assume that a programmer cost $55/hour.  
1. What is the total cost of preventing 6000 defects?
2. What is the cost of preventing one defect?
   2. Suppose that there had been no inspections and three defects per 1000 lines of code escaped into the shipped product. In order to fix a field defect, it cost $30000 per defect.

1. How many defects per 400,000 lines of code will be escaped?
2. What is the overall cost of fixing field defects (derived/computed in part a)?
3. What is the cost relationship between the overall cost calculated in 3.1 and overall cost calculated in 3.2?

Are the types of professional jobs held in the computing industry independent of the number of years a person has worked in the industry? Suppose 243 workers are interviewed. Use the results obtained to determine whether type of professional job held in the computer industry is independent of years worked in the industry. Let = .01. Professional Position Years Manager Programmer Operator Systems Analyst 0–3 6 39 11 13 4–8 28 16 23 24 More than 8 42 10 12 19 Round the intermediate values to 2 decimal places. Round your answer to 2 decimal places, the tolerance is +/-0.05. Observed = Position is of number of years of experience.

Benchmark Metrics Inc.​ (BMI), an​ all-equity financed​ firm, reported EPS of $4.14 in 2008. Despite the economic​ downturn, BMI is confident regarding its current investment opportunities. But due to the financial​ crisis, BMI does not wish to fund these investments externally. The Board has therefore decided to suspend its stock repurchase plan and cut its dividend to $0.65 per share​ (vs. almost $2 per share in​ 2007), and retain these funds instead. The firm has just paid the 2008​ dividend, and BMI plans to keep its dividend at $0.65 per share in 2009 as well. In subsequent​ years, it expects its growth opportunities to​ slow, and it will still be able to fund its growth internally with a target 36%

dividend payout​ ratio, and reinitiating its stock repurchase plan for a total payout rate of 60%.​(All dividends and repurchases occur at the end of each​ year.)

Suppose​ BMI's existing operations will continue to generate the current level of earnings per share in the future. Assume further that the return on new investment is 15%​,

and that reinvestments will account for all future earnings growth​ (if any).​ Finally, assume​ BMI's equity cost of capital is 10%.

Hint​:

Make sure to round all intermediate calculations to at least four decimal places.​  

a. Estimate​ BMI's EPS in 2009 and 2010​ (before any share​ repurchases).

​BMI's EPS in 2009 is $.............​(Round to the nearest​ cent.)

​BMI's EPS in 2010 is​$..........(Round to the nearest​ cent.)

b. What is the value of a share of BMI at the start of 2009​ (end of​ 2008)?

The value of a share of BMI at the start of 2009 is ​$..............​(Round to the nearest​ cent.)

Virgin was founded in 1970 by Richard Branson and is classified as a holding company for multiple ventures under the Virgin Group. When it comes to innovation Virgin is one of the top companies in the world. What began as a mail order record company has evolved into one of the most diverse companies in existence. Virgin invests in and builds companies that revolve around delivering fantastic customer experience and change the scope of industries. They do everything from space tourism to air travel, make comic books and video games. The company now holds over 200 companies and operates in 29 countries. They’ve found that the most successful ideas they get are the ones that are marketing, sales, and customer focused, sit under the Virgin brand, have a well-defined and differentiated customer offer and oftentimes are delivered in partnership with experts in their field.
Virgin takes the ideas it gets and boils them down into several categories. Anything that doesn’t quite fit into an existing company gets sent to corporate development for review. They take the time to read and respond to every proposal. They do not disclose how rewards are awarded but there are substantial ones for good ideas that are implemented. Internally Virgin also sources business plans and ideas from employees. Once a flight attendant had an idea. It got presented to the CEO and before long she had a considerable role in starting up Virgin Brides (which beyond being a fantastic idea didn’t quite work out in the market place). It’s incredible that a flight attendant can have an idea that makes it that far in a company. Notice that Virgin has over 200 companies under it. If you stop for a second you’ll realize just how massive that number is. That is a lot of innovation for a company only 40 years old. Financially they do quite well so obviously something has been working out for them. Not a lot of firms innovate this much or support this much innovation but that’s kind of the key – they don’t just source great ideas, they act on them. Sourcing this many fantastic ideas isn’t easy – it’s a lot of hard work for the company and they have to devote time and resources to going through all of them never mind actually taking the time to respond. But it shows that they care and that they’re serious about this. All great innovations come from an idea. Some go so far as to say it’s the most important part of the process (Seth Godin would likely disagree and say that shipping is the most important). Some companies looking at Virgin’s requirements might find them surprisingly strict, others surprisingly loose. No matter how you view it the only thing that remains true at the end of the day is that Virgin’s strategy works – and it works well.

Required:

What five lessons can other businesses learn from Virgin?